Insurers Get Break From New Law

TALLAHASSEE — A circuit judge Tuesday gave insurance companies a little breathing room in meeting the requirements of Florida's tough new insurance law.

Judge Charles Miner said he would schedule a trial to consider legal challenges to the measure around Sept. 1.

Miner refused to halt enforcement of the law temporarily as more than 30 insurance companies and three trade associations had requested, but he did agree to delay until mid-October a requirement that the companies file detailed information on claims from 1981 to 1985. The law requires that information to be submitted by Sept. 1.

The judge also refused to stop a rate freeze that started July 1 but said that rate increases imposed from May 1 to July 1 could be collected. The law says the freeze is based on rates in effect May 1.

Miner also required insurance companies to place into interest-bearing accounts all money that is to be returned to policyholders because of a required rate rollback Oct. 1. If the insurance industry succeeds in its legal challenge of the law, the companies can retrieve the money. If it is not, the rolled back rates, which amount to a 10 percent premium credit, would go to policyholders.

Miner denied the companies' request to stop temporarily a rate filing that must be submitted to the Insurance Department on Oct. 1. The law requires companies to include in that filing justification for any increases in rates that were in effect Jan. 1, 1984. Without that justification, rates would be rolled back to 1984 levels on Jan. 1, 1987.

Miner also refused to delay implementation of a section of the law that requires insurance companies to give 45 days' notice before canceling or refusing to renew a policy. The judge said,however, that the provision affects only policies that went into effect on or after July 1.

Spokesmen for the insurance industry and Insurance Commissioner Bill Gunter said they were pleased with Miner's ruling.

''It solves the immediate problem, which was doing all the reporting stuff,'' said Dave Fountain, executive director of the Florida Insurance News Service.

''They have a little breathing room there. It clarifies the rate freeze and sets up a plan for rollback refunds that is an equitable approach so that companies don't ultimately lose that money if the court rules in their favor.''

Gunter issued a statement that called the ruling ''a victory for policyholders.''

The insurance industry has challenged the law on constitutional grounds, arguing that it includes too many subjects in one bill, that it forces companies to break contracts with policyholders and that it treats insurance companies differently from other industries.

Miner said the September trial would give both sides ample time to prepare. In giving insurance companies until mid-October to submit data on closed claims to the department, Miner said he was swayed by testimony from insurance executives Friday that the law is vague on what information is required.

''I felt they put on a pretty overpowering case,'' Miner said. ''There are no rules that have been adopted. Before they go to the tremendous expense of generating this information, they need to know what is required.''

The law, written in the final hours of the 1986 legislative session, was designed to curb skyrocketing commercial property and liability insurance rates that state officials say are forcing Florida businesses to close.

Heavily lobbied by groups that saw stricter regulation of the insurance industry as the solution, as well as by groups that wanted changes in the civil negligence system to curb huge jury awards, the Legislature decided to do both in one bill.

The insurance industry was among the the groups pushing for civil negligence changes. Insurance lobbyists maintained that the only way to stop escalating insurance rates was to curb jury awards in negligence cases. These lobbyists say the civil negligence changes included in the bill are not meaningful, largely because they will expire in 1990.